Russia. Cherkizovo Group announces operating results for the June and second quarter of 2018

Cherkizovo Group (MOEX: GCHE), the largest vertically integrated meat producer in Russia, today announces operating results for the June and second quarter of 2018.

Second Quarter 2018 Highlights

Chicken: Sales volumes of 130.98 thousand tonnes declined 5% compared to the previous quarter and were flat compared to 2Q17. Significant average sales price growth, compared to the previous quarter and year-on-year results, is attributed to the chicken market being undersupplied with lower deliveries from some domestic producers, and the positive effect from our Petelinka and Chicken Kingdom branded products quickly gaining market share on key markets.

Turkey: JV Tambov Turkey increased volumes in 2Q18, both compared to the previous quarter and 2Q17 results. A higher share of branded value-added products in the sales mix resulted in an average price rising 16% compared to the previous quarter, however, down 13% compared to 2Q17.

Pork: Production and sales volumes remained on par with the previous quarter, while up 8% compared to 2Q17 results, as we further ramped up production at newly built facilities. Prices were up 21% compared to the previous quarter, as the pork market finally cleared accumulated inventory of the Brazilian meat, banned for import at the end of 2017; and remained flat compared to 2Q17.

Meat Processing: Sales volumes were up compared both to the previous quarter and 2Q17 results due to a higher level of pork production that in turn led to an increase in carcass sales. Higher sales volumes of dry and semi-smoked sausages are responsible for average sausages prices growth, while cuts and carcass prices dynamics were in line with live pork prices.

Grain: Due to the seasonal nature of the business, results of this segment are reported annually to better reflect business performance.

Monthly performance

June 18

June 17

Change % y-o-y

May 18

Change % m-o-m

Chicken

Volume sold, thousand tonnes

42.55

41.97

1%

44.81

(5%)

Average price, RUB/kg

98.85

89.63

10%

91.80

8%

Turkey*

Volume sold, thousand tonnes

3.70

2.33

59%

3.65

1%

Average price, RUB/kg

137.39

152.44

(10%)

132.51

4%

Pork**

Volume produced, thousand tonnes

17.60

17.85

(1%)

21.65

(19%)

Volume sold, thousand tonnes

16.85

17.14

(2%)

20.54

(18%)

Average price, RUB/kg

100.11

95.50

5%

99.17

1%

June 18

June 17

Change % y-o-y

May 18

Change % m-o-m

Meat Processing

Volume, thousand tonnes

19.49

15.84

23%

19.70

(1%)

Sausages

8.88

9.33

(5%)

9.17

(3%)

Cuts

3.06

4.22

(27%)

3.46

(12%)

Carcass

6.61

1.69

291%

6.34

4%

By-products

0.94

0.61

54%

0.73

29%

Average price, RUB/kg

165.72

169.46

(2%)

166.31

(0%)

Sausages

182.37

170.61

7%

176.87

3%

Cuts

196.87

195.02

1%

199.15

(1%)

Carcass

145.58

140.85

3%

145.38

0%

By-products

47.83

53.96

(11%)

59.34

(19%)

Quarterly performance

2Q 18

2Q 17

Change % y-o-y

1Q 18

Change % q-o-q

Chicken

Volume sold, thousand tonnes

130.98

129.36

1%

137.55

(5%)

Average price, RUB/kg

93.12

89.93

4%

82.07

13%

Turkey*

Volume sold, thousand tonnes

10.56

6.10

73%

9.74

8%

Average price, RUB/kg

134.36

154.50

(13%)

116.02

16%

Pork**

Volume produced, thousand tonnes

57.65

53.40

8%

57.52

0%

Volume sold, thousand tonnes

54.99

50.70

8%

54.84

0%

Average price, RUB/kg

98.46

98.70

(0%)

81.59

21%

Meat Processing

Volume, thousand tonnes

57.47

48.85

18%

53.06

8%

Sausages

26.79

27.86

(4%)

25.02

7%

Cuts

10.22

13.04

(22%)

11.41

(10%)

Carcass

17.76

5.81

206%

13.51

31%

By-products

2.69

2.14

26%

3.11

(13%)

Average price, RUB/kg

165.46

172.23

(4%)

155.29

7%

Sausages

178.07

171.73

4%

175.52

1%

Cuts

198.86

204.08

(3%)

179.27

11%

Carcass

144.23

146.06

(1%)

120.21

20%

By-products

53.41

55.59

(4%)

57.00

(6%)

* Volume and prices reported in turkey section represent sales of the Trading Company “Cherkizovo”.

** Difference in the volume produced and volume sold in the pork segment is attributable to retained gilts replacement. Volumes sold include both intercompany and 3rd party sales.

When using the materials - a reference to the BlackSeaGrain site is required. When using information on the Internet - a hyperlink to the site blackseagrain.net is required. Reproduction and distribution of published information in any form by any means is prohibited without prior written consent of the copyright holder. Administration of this site may not share the opinion of the author and is not responsible for any copyright material.